How to calculate profit on a resale item

A simple way to separate purchase cost, direct costs, selling price, profit and margin before you buy more stock.

Start with the complete direct cost

Purchase cost is only the first input. Add shipping, packaging, marketplace fees or other direct costs that apply to the item. Keep taxes and business overhead separate unless your calculation is explicitly configured to include them.

Calculate estimated profit

For a simple estimate, subtract the purchase cost and direct costs from the expected selling price:

estimated profit = selling price - purchase cost - direct costs

Example: if an item costs €20, direct costs are €4 and the expected selling price is €35, the estimated profit is €11 before any costs not included in the calculation.

Do not confuse markup and margin

Markup compares profit with cost. Margin compares profit with selling price:

markup = profit / cost × 100
margin = profit / selling price × 100

In the example above, markup is 55% and margin is about 31.4%. Both can be useful, but they answer different questions.

Check the result against reality

Use a conservative selling price and include fees that you can verify. Record the estimate and compare it with the eventual sale. A calculation is a decision aid, not a guarantee of a sale or a substitute for accounting advice.